Chubut province is looking to extend the maturities on about US$600 million of debt.

The province is seeking a debt re-profiling for its US dollar bonds, pushing the maturities to around 12 years from a maximum length of seven years now, Chubut’s Economy Minister Luis Tarrio said in a phone interview with Bloomberg.

The local government has sent its Congress a bill on June 18 asking for authorisation to begin talks with creditors and Tarrio expects the bill to be approved sometime in August, but doesn’t see talks with investors happening before the October presidential elections.

The province’s bonds are backed by oil and gas royalties that are paid directly into a trust, guaranteeing their repayment. The province, which has US$1 billion in bonds outstanding from July 2019 through 2026, is seeking to relieve the pressure on its current expenditures, which are mostly explained by public sector wages.

“This extension would be a huge achievement,” Tarrio said in an interview on July 11. “We want to change the debt profile of our foreign currency liabilities, to make them more compatible with the timelines of our oil projects.”

Though the provincial government’s bill calls for a “restructuring,” Tarrio said there are no risks for current bondholders, with provincial authorities only seeking to modify the bond maturities and not the amounts to be paid. He’s being cautious with the wording a year and a half after a gaffe sent its bonds crashing when the use of that same term led to confusion among investors and stoked fears of default.

The move also comes as confidence on the development of crude and shale in the south of Argentina grows.

The price on Chubut’s bond due 2026 fell 1.6 cents on the dollar to 87.62 cents at 2.25pm on Wednesday in Buenos Aires.